Believe me...I've learned the hard way....it's best to offer free shipping to your buyers if at all possible.
First of all, we sellers open ourselves up to the possibility of getting nailed with a low DSR rating or negative/neutral feedback if we happen to upset our buyers with what they consider an excessive shipping or handling charge. No matter how much we try to explain the cost of shipping materials, our time, gas, etc... it will make no difference to the buyer who is looking for an exceptional bargain. WE know what it costs us to ship an item, but most buyers do not...and they really don't care. In this economy every penny counts, so buyers will look for the item that ships free before checking out any other one that is being offered. In the past there have been sellers who have tried to make a large profit on shipping charges, which infuriated not only buyers and other sellers, but eBay as well. Unfortunately this unscrupulous activity has made it difficult for the rest of us who were only charging our buyers a fair and honest shipping charge.
Secondly, eBay encourages us to offer free shipping...BIG time! In fact, during the holiday season eBay even offered an additional discount on our fees if we offered to ship our treasures for free. In addition, items that ship free are more visible in the "Best Match" search...so these items are much easier for the buyer to find when doing a search....this is not a small thing!
Thirdly, (and the most expensive, and what I consider the most important reason) we now have to pay Final Value Fees on the total price of the items we sell, INCLUDING the shipping charges. I realize that most sellers think this policy is completely unfair, but it is what it is...and we simply have no choice but to pay it.
I made the decision to offer free shipping when the above policy was put in place...I choose not to pay a Final Value Fee on shipping charges...period. ( Of course I've had to increase the cost of most of my items to help pay my shipping expenses. I realize this takes some time and work to change our listings, but I have found that in the long run it is worth the effort. ) I believe that eBay instituted this seemingly unfair policy to force sellers to finally realize it is in our best interest... and most importantly, to stop the dishonest shipping cost gougers/sellers that I previously mentioned!
I rarely use the auction format, as I sell my treasures out of my eBay Store...I mostly use the "Buy It Now" format with a "Best Offer" option. I do have some special items that cannot be shipped free because they are very heavy, need expensive additional insurance, or are difficult to pack. But I would say that 98% to 99% of my inventory is shipped free of charge.
Auction sales may be a little more difficult, if starting them at a very low price and still managing to ship free of charge. Once in a while, when eBay offers us free auction listings, I list a few things to simply draw more people into my store. I simply establish a decent/fair starting price that is a bit lower than the price of the item in my store.
I have found that free shipping is a BIG plus for most buyers, as quite a few have let me know how much it is appreciated.... and it has most certainly made an enormous difference in my feedback and my DSR rating.
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